In this article, we discuss 10 AI news investors probably missed.
As artificial intelligence continues to reshape industries, experts are increasingly focusing on how its integration will impact investment strategies. The growth of AI presents a unique opportunity for investors to diversify their portfolios, not only by targeting leading tech companies but also by considering the broader ecosystem, including infrastructure and cybersecurity.
How AI is Shaping the Next Wave of ETF Opportunities
In a CNBC interview, Jay Jacobs from BlackRock and ETF expert Dave Nadig discussed the future of ETFs in 2025, particularly focusing on the accelerating phase of AI infrastructure. Jacobs highlighted that AI adoption is still in its early stages, with significant investments being made by megacap tech companies in data centers, chips, and model training. He emphasized the importance of looking beyond just the tech giants, as other sectors like semiconductors, data centers, and software companies are poised to benefit from AI. Jacobs also pointed out that cybersecurity investments are becoming more crucial as the value of data grows.
Nadig added that AI’s impact will also extend to infrastructure sectors, especially power, and emphasized the importance of retail companies integrating AI into consumer devices. Finally, both experts acknowledged the growing importance of physical infrastructure, such as electricity, data centers, and materials like copper, in supporting the rapid expansion of AI technologies.
READ ALSO: 11 Trending AI Stocks on Latest News and Ratings and 10 AI Stocks Taking Wall Street by Storm.
AI as a Business Tool: Evolving Pricing Strategies
On December 10, Bloomberg reported that OpenAI CFO Sarah Friar discussed the potential for charging business users thousands of dollars per month for its AI software to better reflect its value. She explained that for users, such as lawyers or academics, AI tools could function like having a highly skilled assistant, making a higher subscription fee reasonable. Currently, OpenAI offers a $20-per-month plan for consumers and a $200 option for access to more powerful models.
The company also charges businesses on a per-user basis. In the future, Friar suggested the possibility of a value-based pricing model for AI products, based on the benefits companies gain, such as automating tasks and reducing the need for additional employees. This approach could help offset the high costs of developing AI systems.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 AI News Investors Probably Missed
10. TSS, Inc. (NASDAQ:TSSI)
Number of Hedge Fund Holders: N/A
TSS, Inc. (NASDAQ:TSSI) offers integration technology services for IT systems, including design, engineering, and project management. The company also provides AI-driven solutions for data centers, network facilities, and security operations, serving both private and government sectors.
TSS (NASDAQ:TSSI) announced a multi-year lease for a 212,793-square-foot facility in Georgetown Logistics Park, Texas, as part of its plan to relocate its headquarters and expand its factory. This move aims to support the company’s growth in AI and high-performance computing infrastructure. CEO Darryll Dewan highlighted the expansion as a key step following a major customer agreement in October, enabling TSS to meet rising demand for AI infrastructure. The new facility, doubling its space, is expected to be operational by early 2025.
9. Rezolve AI Limited (NASDAQ:RZLV)
Number of Hedge Fund Holders: 3
Rezolve AI Limited (NASDAQ:RZLV) specializes in e-commerce AI, using a 300B-parameter language model trained on retail data to develop conversational commerce and agentic apps.
Roth MKM analyst Rohit Kulkarni has initiated coverage of Rezolve AI (NASDAQ:RZLV) with a Buy rating and a $4 price target. Kulkarni highlighted recent partnerships with Microsoft, Google, and Tether Wallet as key growth drivers. Rezolve’s AI solutions aim to replicate the in-store sales experience by improving user interactions in search, comparison, customer service, and post-sale processes. The technology integrates chatbots and conversational workflows into marketing, commerce, and payment platforms.
8. Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX)
Number of Hedge Fund Holders: 16
Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) is a clinical-stage biotech company leveraging AI and technology to advance drug discovery. It also recently announced its LOWE Drug Discovery Software, a language model designed to streamline drug discovery by running experiments with AI on large datasets.
Recursion (NASDAQ:RXRX) reported early data from its AI-designed CDK7 inhibitor, REC-617, in a Phase 1/2 trial for advanced solid tumors. Created through AI-led precision methods, REC-617 reached clinical testing within 12 months of candidate identification. It demonstrated promising pharmacokinetics and pharmacodynamics, with rapid absorption, controlled target engagement, and favorable safety. The study observed one partial response in a heavily pre-treated patient and stable disease in others. These findings highlight REC-617’s potential for addressing resistance mechanisms in cancer therapy. Recursion plans further dose escalation and combination trials in 2025, emphasizing its AI-driven approach to drug development.
7. STMicroelectronics N.V. (NYSE:STM)
Number of Hedge Fund Holders: 18
STMicroelectronics N.V. (NYSE:STM) designs and manufactures semiconductor products across various industries, including automotive, industrial, and personal electronics. Its offerings include AI-enabled solutions such as MEMS sensors, wireless connectivity ICs, and microcontrollers, serving applications in the automotive, communications, and industrial sectors.
STMicroelectronics (NYSE:STM) introduced the STM32N6 microcontroller series, its most powerful yet, featuring the proprietary Neural-ART Accelerator for embedded AI tasks on December 10. The innovation enables advanced machine learning capabilities, such as computer vision and audio processing, in cost-effective and energy-efficient edge devices. The STM32N6 delivers significantly improved AI performance, making it suitable for consumer and industrial applications. ST also supports developers with an updated AI software ecosystem, aiming to advance AI use in real-time systems while reducing barriers to entry. This marks a shift in leveraging AI at the edge, traditionally seen as a domain for data centers.
6. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 33
Super Micro Computer, Inc. (NASDAQ:SMCI) designs and manufactures high-performance server and storage solutions, focusing on AI, cloud computing, and 5G markets.
Reuters reported that Super Micro’s (NASDAQ:SMCI) CEO, Charles Liang, expressed confidence that the company’s stock will not be delisted from Nasdaq, despite facing a deadline to file its delayed financial reports by February 25. The company, which saw stock growth due to the AI boom, was affected by an auditing scandal after Ernst & Young raised concerns about governance and internal controls. A special committee found some executive lapses, but no evidence supporting the auditor’s concerns. Despite the CEO’s assurance, Super Micro’s (NASDAQ:SMCI) stock is under pressure and is down around 9.5% in the first 3 hours of trading on December 10.
5. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 44
Cloudflare, Inc. (NYSE:NET) provides a wide range of cloud services including security solutions for various platforms like public and private clouds, IoT devices, and SaaS applications. It offers AI-powered tools like bot management, web optimization, and zero trust services to enhance security and performance.
On December 10, Cloudflare (NYSE:NET) CTO John Graham-Cumming revealed the company’s plans to diversify its chip suppliers to support the growing demand for AI applications across industries. In a conversation on Yahoo Finance’s Catalysts, he discussed the expanding AI landscape and increasing demand for Nvidia’s advanced chips.
He acknowledged Nvidia’s market leadership but noted that Cloudflare anticipates using multiple chip providers in the future to support various AI models within its network. This reflects a broader growth in AI applications across industries, raising concerns about whether chipmakers and operators can meet the rising demand.
4. Equinix, Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 55
Equinix, Inc. (NASDAQ:EQIX) is a digital infrastructure platform that enables organizations to scale rapidly and launch digital services with agility. The company supports AI-driven interconnection and collaboration, helping businesses improve performance while meeting sustainability goals.
Wells Fargo increased its price target for Equinix from $985 to $1,100, maintaining an Overweight rating on the stock. The firm is optimistic about data center companies heading into 2025, citing continued high leasing activity, rising market rents, and strong potential for 8%-10%+ growth in AFFO per share by 2026 and beyond. Equinix is considered Wells Fargo’s top pick.
3. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 60
Dell Technologies Inc. (NYSE:DELL) offers AI-optimized servers and storage solutions, focusing on modernizing infrastructure and accelerating business applications.
It was announced on December 9 that Dell (NYSE:DELL) is expanding its partnership with CoreWeave by delivering the first Dell PowerEdge XE9712 server racks with NVIDIA GB200 NVL72 to improve CoreWeave’s AI cloud services platform. This collaboration aims to meet the growing demand for high-performance cloud environments for generative AI. CoreWeave will use Dell’s liquid-cooled, fully integrated IR7000 racks, supported by Dell’s AI professional services, to optimize its data center design.
The partnership combines Dell’s infrastructure with NVIDIA’s accelerated computing and networking, enabling CoreWeave to scale AI workloads efficiently. CoreWeave will also benefit from Dell’s expert deployment services and support, streamlining the implementation of large-scale AI deployments.
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) designs and manufactures semiconductor products, including microprocessors and GPUs, optimized for AI applications. The company offers AI-focused hardware solutions, serving data centers, cloud providers, and system integrators.
On December 9, BofA downgraded AMD from Buy to Neutral, reducing its price target from $180 to $155, as reported by The Fly. The downgrade reflects concerns over increased competition from Nvidia in AI, as well as a growing preference for Marvell and Broadcom’s custom chips in the cloud market, which may limit AMD’s potential for market share growth. Additionally, BofA anticipates a possible correction in the PC processor market in the first half of 2025.
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures semiconductor devices, offering processes for logic, mixed-signal, and embedded memory technologies used in AI applications. Its products support high-performance computing, automotive, IoT, and consumer electronics, driving advancements in AI hardware and processing.
Taiwan Semiconductor (NYSE:TSM) saw a 34% increase in sales in November, continuing strong growth driven by demand for AI hardware. The company’s sales for October and November rose 31.4%, and analysts expect a 36.3% growth for the quarter, as per a Bloomberg report. Despite concerns over the pace of AI data center expansion, TSMC is benefiting from the demand for AI and high-end smartphone chips. TSMC’s growth momentum is expected to continue into 2025, with 4Q sales potentially reaching NT$861.5 billion.
While we acknowledge the potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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